High Yield Market Statistics

Historical Returns of UK Equities and High Yield bonds

This chart plots the returns of key indices used by the industry to assess the performance of equities, investment grade corporate bonds, and high yield corporate bonds.

High yield corporate bonds have outperformed UK equities and investment grade bonds over the last 20 years both in terms of returns and price volatility.

Historical Default and Default Loss Rates

The 12 Months Default Rate measures the proportion of companies that failed to repay their bonds in the last 12 months. The lower the rate the better. Between July 2015 and December 2022 it has been as low as 0% (i.e. no defaults over the last 12 months), and as high as 1.5%, with a mean of 0.76% & median of 0.8%.

Many bonds are secured, meaning they are backed by assets, which, in the event of default, can be sold to recover funds for bondholders.

The 12 Months Default Loss Rate measures the amount lost after the sale of assets to recover funds for bondholders. Between July 2015 and Dec 2022 corporate bondholders lost between 0% and 3.4% due to defaults, with a mean of 0.94%, and a median of 0.61%